Tax audit- urgent
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 September 2013
VERY VERY URGENT:
A Pvt Ltd Company is in business - Developer/ Builder.
However the Co is also a partner in a partnership firm . The Share of Profit is Rs. 8 cr. during the year
Now
Question 1. Should this share of Profit of Rs. 8 Cr be considered for tax audit. Will this company be liable to tax audit under sec 44 AD.??
Question 2. Will this share of Profit of Rs. 8 Cr be taxable under Book Profit in MAT.?? (The company has already paid tax in partnership firm on Rs. 8 cr profit).
Other Information :.
Since the project undergoing is under construction.
The T/O is Nil.
Other Income : Share of Profit from Partnership firm - Rs. 8 Cr.
Expenses in P& L A/c : Rs. 11 lacs
Net Profit : Rs. Rs. 7.90 cr approx
The Expenses of project undergoing are of Rs.3.28 cr - trsfd to COP (including purchases of Rs.78.94 lacs)
SIR KINDLY ANSWER THE ABOVE QUESTION WITH A VALID SOURCE / LINK.
THANKS IN ADVANCE.
A Pvt Ltd Company is in business - Developer/ Builder.
However the Co is also a partner in a partnership firm . The Share of Profit is Rs. 8 cr. during the year
Now
Question 1. Should this share of Profit of Rs. 8 Cr be considered for tax audit. Will this company be liable to tax audit under sec 44 AD.??
Question 2. Will this share of Profit of Rs. 8 Cr be taxable under Book Profit in MAT.?? (The company has already paid tax in partnership firm on Rs. 8 cr profit).
Other Information :.
Since the project undergoing is under construction.
The T/O is Nil.
Other Income : Share of Profit from Partnership firm - Rs. 8 Cr.
Expenses in P& L A/c : Rs. 11 lacs
Net Profit : Rs. Rs. 7.90 cr approx
The Expenses of project undergoing are of Rs.3.28 cr - trsfd to COP (including purchases of Rs.78.94 lacs)
SIR KINDLY ANSWER THE ABOVE QUESTION WITH A VALID SOURCE / LINK.
THANKS IN ADVANCE.
30 September 2013
Answer 1. The profit from partnership is exempted from tax under section 10(2A). The same shall not be included in turnover for application of 44AB.
Whether the company is liable for tax audit udner 44AB shall depend on its business turnover.
Answer 2. MAT is not applicable on profit from partnership.
Kindly refer to Section 11JB(2).
Whether the company is liable for tax audit udner 44AB shall depend on its business turnover.
Answer 2. MAT is not applicable on profit from partnership.
Kindly refer to Section 11JB(2).
Message likes :
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30 September 2013
I agree with Mr. nikhil because, 44AB shall depend on its business turnover.
and
Profit from Partnership firm, it is exempt in the Chapter-III "INCOME WHICH DO NOT PART OF THE INCOME" under section 10(2A)
115JB is not applicable on Partnership Firm it is on Company.
and
Profit from Partnership firm, it is exempt in the Chapter-III "INCOME WHICH DO NOT PART OF THE INCOME" under section 10(2A)
115JB is not applicable on Partnership Firm it is on Company.
30 September 2013
Yes the turnover depends upon the nature of business. So, share of profit shall not be included.
21 October 2013
The Income Tax Act is so designed that you have to give effect first to the small section and then proceed forward accordingly.
The share of profit falls u/s 10 which is much before section 115JB so it will not come under Book Profit.
The share of profit falls u/s 10 which is much before section 115JB so it will not come under Book Profit.
26 November 2013
Agreed with above suggestions.
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